Property & Casualty Insurance Exam (National Portion)Casualty InsuranceEasy
A client's auto policy has bodily injury liability limits of $100,000 per person / $300,000 per accident and property damage liability of $50,000 per accident. This is an example of what type of liability limit structure?
- ADeductible Limit
- BSplit Limits
- CAggregate Limit
- DCombined Single Limit (CSL)
Show answer & explanationAnswer & explanation
Correct answer: B. Split Limits
Split limits are expressed as three separate figures: the maximum payable for bodily injury to one person, the maximum for bodily injury to all persons in one accident, and the maximum for all property damage in one accident. This question clearly states three distinct limits.
Why the other options are wrong
- A. A deductible is the amount the insured pays out-of-pocket before the insurer pays, not a liability limit structure.
- C. An Aggregate Limit specifies the maximum amount an insurer will pay over the entire policy period, typically for CGL policies, not per accident for auto.
- D. A Combined Single Limit (CSL) would be a single amount that applies to all bodily injury and property damage claims from one accident.
Split Limits
A type of liability limit structure in auto insurance where different maximum amounts are specified for bodily injury per person, bodily injury per accident, and property damage per accident.
- Three separate numbers: BI per person / BI per accident / PD per accident.
- Common in Personal Auto Policies (PAP).
- Each component has its own cap.
Memory trick: Split for specifics, Combined for simplicity.